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INDIAN BANK V. MAHARASTRA STATE BANK COOPERATION

Indian Bank v. Maharashtra State Co-Operative Marketing Federation Ltd. (1985) 5 SCC 69

ISSUE:

  • Whether the bar to proceed with the trial of the subsequently instituted suit, contained in section 10 of the Code of Civil Procedure, 1908 is applicable to the summary suit filed under Order 37 of the Code?

RULE:

  • The Supreme Court’s opinion, the Division Bench of the Bombay High Court was in error in taking a different view. It had relied upon the decision of this Court in Harish Chandra v. Triloki Singh (AIR 1957 SC 444). That was a case arising under the Representation of People’s Act and, therefore, it was not proper to apply the interpretation of the word ‘trial’ in that case while interpreting section 10 in the context of Order 37 of the Code.

FACTS:

  • The respondent Federation applied to the appellant bank on 5.6.1989 to open an Irrevocable Letter of Credit for a sum of Rs. 3,78,90,000/- in favour of M/s. Shankar Rice Mills. Pursuant to that request to Bank opened an Irrevocable Letter of Credit on leave on the Federation to defend the suit conditionally upon the Federation depositing Rs.4 crores in the Court. The summons for the judgment was disposed of accordingly and the Notice of Motion was dismissed.
  • Aggrieved by the order of the learned Single Judge in summons for judgment Federation filed Appeal before the Division Bench of the High Court, and against the order passed on Notice of Motion, it preferred Appeal.
  • The Division Bench was of the view that the word ‘trial’ in section 10 has not been used in a narrow sense and would mean entire proceedings after enters his appearance, held that section 10 of the Code applies to a summary suit also.
  • It also held that the summary suit filed by the Bank being a subsequently instituted suit was required to stay. It allowed both the appeals; set aside the orders passed by the learned Single Judge and stayed the summary suit till the disposal of the prior suit filed by the Federation.

HELD:

  • Leave granted.
  • Therefore, allow these appeals, set aside the impugned judgment of the Division Bench of the High Court, and restore the order passed by the learned Single Judge.